Tesla’s Pay Deal to Keep Elon Musk: All or Nothing(nytimes.com)
nytimes.com
Tesla’s Pay Deal to Keep Elon Musk: All or Nothing
https://www.nytimes.com/2018/01/23/business/dealbook/tesla-elon-musk-pay.html
16 comments
He really needs to find a COO. He needs his Tim Cook. This is a good way to show shareholders he's all in, but he's not a genius at Operations, he needs to find someone who is.
He'll learn if that's a role he's meant to evolve into.
what does that mean? haven't both tesla and spaceX historically struggled with operations under his leadership? don't you think he'd have learned by now if he could?
I think you could only honestly say that Tesla and SpaceX have struggled with operations under his leadership if you're ignoring the level of success that both companies reached so far. He's busy, he's admitted and aware of switching costs of leading two companies - there is value to this though of course too; imagine if Elon only focused on Tesla and not SpaceX - where would we be as a society, where would Elon be position wise? He's following his intuition and his heart which he clearly wears on his sleeves. He's a wonderful role model, and we should support everyone the same way he's gained support from others; yes, he was entrepreneurial from a young age, and "got lucky" by knowing to move to the place that dreams are more easily funded. We fail as a society supporting everyone to reach their dreams to the same level, part of the reason are systems in place that are designed to control and funnel everyone into an economically efficient model - however ignoring the qualitative impact - it's why the idea of flexible learning, learning online at your own pace, etc are going to become the future.
Not a bad idea. Elon Musk has Gwynne Shotwell as president at SpaceX and has been really effective at focusing SpaceX on effectively focusing and executing on Falcon 9.
SpaceX effectively has two strong leaders, not just Musk. Musk would be lucky to strike gold twice and find another leader as great (and as complementary) as Gwynne to help run Tesla.
SpaceX effectively has two strong leaders, not just Musk. Musk would be lucky to strike gold twice and find another leader as great (and as complementary) as Gwynne to help run Tesla.
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Fun bit: Mr. Musk does not take a salary, although under California State law, Tesla is required to pay him at least minimum wage. Tesla sends him checks that pay him a little more than $37,000 annually.
A first minimum wage CEO of a public company?
A first minimum wage CEO of a public company?
Salary does not reflect total compensation. Even the infamous "$1 salary CEOs" still take home millions in options, bonuses, and other perks.
No, there are lots of CEOs that only take $1 salary, in states where they can be exempt from minimum wage.
Steve Job's salary was $1, this was widely reported.
Bragging about having a $1 salary is basically telling your employees that you make so much more in other benefits that you can choose to forego the one thing (salary) that makes up the vast majority of their total comp.
In Steve Jobs' case, it was meant to instill confidence that he was in it for the long term - at the time, Apple was on death's doorstep.
He also had enough cash in the bank prior to re-joining that he didn't really need the money.
He also had enough cash in the bank prior to re-joining that he didn't really need the money.
Didn't he also get the use of a private jet or something like that? That might be considered part of his compensation and so take him above minimum wage.
Yes, any private use of company property will require tax reporting and he would have to pay income tax on that jet usage of at least cost.
This plan is roughly isomorphic to option compensation. It has a serious incentive compatibility problem: the value of the options increases with volatility/risk, so incentivizes unnecessary, and even negative expectation, risk taking. Maybe Musk has a big enough stake in Tesla to mitigate this effect, but it's definitely not a risk free approach for minority shareholders.
It's also linked to operational milestones, so market cap has to be met with actual progress. That's much better than market cap alone.